Posts Tagged ‘Singapore’

He leaves us just as Singaporeans are finally falling out of love with his People’s Action Party, as I blogged after visiting Singapore last October. It is a pretty good record for someone who started out in politics in the 1950s.

Harry’s departure severs the direct link between south-east Asia’s political elite and its colonial past. (Mahathir is still alive, but he was not a player in the colonial era.) This seems to me to be the key import of this moment. There won’t be another Harry, born into an Anglicised and privileged family, angered yet titillated by colonial power, driven to reinvent himself as a true Chinese (and struggle to learn the Chinese language that was foreign to him as a kid), then striving to find a happy medium as Singapore’s leader somewhere between Asian nationalist and American lickspittle. He opted for a combination of proto-Victorian morality re-dressed-up as Asian values, and the biggest CIA station in the region, that saw American lickspittle win comfortably.

Pragmatism is I think what defined Harry more than anything. He was a fantastic leader for Singapore. But he didn’t really give a toss about south-east Asia so long as Singapore was ok. In this sense he was a modernisation of British governors of the Crown Colony of Singapore. Smarter, more savvy, more efficient than any colonial goon, but at the end of the day nothing very different. He provided phenomenal leadership, and he led by example. But the notion he had ‘vision’ at the level of south-east Asian politics and development does not stand up for me.

So goodbye Harry. I think of you as the full-on Chinese student at Cambridge, with your motorbike and your cigarettes, determined to prove you were better than the gweilos, even if what mattered most to you all too often was their approbation. I wonder: did you used to flick your cigarette butts away on the street, such that you would have been fined in Lee Kuan Yew’s Singapore? We may never know.

Later:

Here is an essay about Lee Kuan Yew by Orville Schell in The Wall Street Journal. It is not the way I would tell Harry’s story, and is something of a eulogy, but worth reading.

The quality outs when the dust has settled. Jerry Cohen relates encounters with Harry across the decades in this article. Note Harry’s instructions, after he gave up smoking, that no one should smoke when he attended a social gathering. Including in the United States…

This recent documentary about Singapore’s political exiles is much praised. If you can find some way to see it. I have not.

Like this:

China held its Central Economic Work Conference last week, chaired by president Xi Jinping, so here are a few thoughts on the current state of the Chinese economy and a few links to an article I have written, and talks I have given, recently about the Chinese economy.

First up, the slogan du jour is definitely ‘new normal’ (新常态). Xi Jinping has been using this for about six months, but now he is really using it. Xinhua’s short, official report on the conference has ‘new normal’ in the headline and ‘new normal’ six times in the text. See here for the English version.

What does it mean? It means that local politicians, state firms, and everybody else should dial back their expectations about credit and growth. The increase in both is slowing and that is the way it is going to be as China undertakes a deleveraging process in the banking and corporate sectors. There is not going to be the kind of collapse in growth that many have predicted. The government has plenty of room to fine tune the slow-down, Chinese exports remain competitive, and the global economic environment, while not great, is not a disaster from the perspective of China’s needs. Look out for reported GDP growth in 2015 between 6-7 percent.

Against this background reforms will continue to increase the extent to which the market prices credit in China’s economy. There has already been a big shift in favour of lending to the private sector since the global financial crisis (see my review of Nicholas Lardy’s new book, below), and this is one aspect of an ongoing financial liberalisation process. To my mind, this explains the recent strong performance of the Chinese stock market much better than claims it is down to an interest rate cut (which wasn’t really a cut at all given falling inflation). Previous run-ups in the Chinese market have coincided with periods of financial sector deregulation. The difference this time I suspect is that the bull market will last longer.

All in all the outlook is a not unattractive one: slower growth, better credit rationing hence higher quality growth, and a rising share for consumption in the economy at the expense of slowing investment. The main risk — as was the case during Zhu Rongji’s long period of ‘structural adjustment’ in the 1990s — is that the central government listens to local politicians who say they cannot maintain ‘social stability’ without more credit and growth. Zhu didn’t listen to such imprecations, and we have to hope Xi won’t either. As the slogan says, China needs and is getting a new normal. Otherwise the books really cannot be balanced and financial system risk will become unmanageable.

Below is a link to download the review of Nick Lardy’s latest book, Markets Over Mao, that I wrote for the latest China Economic Quarterly. The book makes an important contribution to the optimists’ case that China will overcome its current slough of non-performing loans in the banking system.

This next link is to a download of a synopsis of a talk I gave at the Madariaga College of Europe in Brussels (an EU think-tank) a couple of weeks ago. It is about how China’s development model is similar and dissimilar to those of Japan, Korea and Taiwan. The theme will be familiar to anyone who has read How Asia Works, but there are some additional, up-to-date thoughts about China as well as responses to questions raised by the Brussels nomenklatura. The precise topic I was asked to speak on is ‘What can east Asian countries learn from China’s economic policies?’

The Youtube video below is a speech I gave at the National University of Singapore in October (blog entry about that trip here) on the subject of ‘When will governance matter to China’s growth?’ (governance here meaning institutions like a free and fair and prompt judiciary). Roger Cohen of the New York Times speaks first about the role of the US in east Asia. Then I speak at roughly the 25-minute mark. Then there is a joint Q&A.

And here is another Youtube video where I spoke separately about How Asia Works at the National University of Singapore. There is quite a long Q&A in which lots of questions about development from a more Singaporean perspective are addressed.

I failed to write anything the week ending 18 October despite an interesting trip to participate in the 10th anniversary of the Lee Kwan Yew School of Public Policy at the National University of Singapore. (They invited you, you’re thinking. Yes, they did. As Saul Bellow once wrote: ‘There is nothing too rum to be true.’)

I also had a wonderful side-visit that week across the causeway to Johor Bahru, about which I will say nothing more than that if you have never read Han Suyin’s classic novel And The Rain My Drink, you should get on and do so. The book is particularly recommended for Chinese, Indians, Malays, Japanese and assorted gweilos, all of whom feature amid the chaos of the Emergency in Malaya/Singapore. What is more, there is a new edition, published by Monsoon Books that contains two, new short forewords; one is by Han’s former ‘liberal’ Special Branch husband; and one is by a well-known Malaysian human rights lawyer. The forewords unlock a few secrets about the writing of and background to the book. The copy I picked up in Singapore has the cover contained in the previous link; the copy available on Amazon has a different cover but an online review indicates it has (at least) the additional foreword by Han Suyin’s second husband. The book is not a bad gift.

Aside from the trip to JB (the treatment of hundreds of thousands of Malaysians who cross the border for work each day is pretty shocking on both sides; waiting time is frequently hours), the week in Singapore gave me a chance to speak with a bunch of policy people and a couple of ministers, and so here are a few thoughts about a place I don’t often talk about:

Singapore menu du jour:

1. The Great Unwashed are becoming the Great Ungrateful. In the 2011 election, Harry Lee’s People’s Action Party (PAP) got, by Singapore standards, a kicking, hit by a negative vote swing of almost 7 percentage points which took it down to 60 percent of votes cast. More and more people have had enough of the PAP’s arrogance, its brutal elitism and its lack of the common touch. On top of this there is Singapore’s hideous inequality (Gini of income inequality at a record 0.54), the out-of-control immigration (including horrific numbers of dumb, fat gweilos), and the apparently congenital inability of PAP politicians to think in terms of the population’s interests as a whole. Back in the UK, the PAP makes me think of David Cameron and George Osborne on a really bad day.

2. Never underestimate Harry, or indeed Little Harry. The PAP remains a formidable machine when it comes to co-opting Singapore’s best and brightest. A reasonable example is chipper Minister for Culture, Community and Youth, Lawrence Wong, whom I had the pleasure to chat to. He is a big supporter of new PAP measures to curb real estate speculation and increase welfare transfers to the poor. It is not fundamental change, however it is change at the margin. The PAP’s logo may have been inspired by that of Oswald Mosley’s British Union of Fascists, but the PAP has enjoyed considerably more success and longevity.

Oswald

Harry

3. So the big PAP trope just now is that the party is becoming much more touchy-feely and getting down with the labouring masses. At a public forum, many-times minister — most recently Foreign Minister — George Yeo, who became the most senior PAP figure since the 1960s to lose his seat in 2011 (‘arrogance’, said one of my taxi drivers), summed up the required shift in elegant philosophical terms. He said that Singapore must move on from ‘utilitarianism’ and seek policies that work for as many people as possible. In other words, the crude majority (assuming there even is one in the next election, in 2015) should no longer ride rough shod over the interests of minority groups, be they the very poor, Malays, whomever. He didn’t use the second philosophical designation, but what he meant is that Singapore needs to shift from utilitarianism to something more Pareto efficient, where policy gains for the majority do not come at the expense of other people.

4. Unfortunately I am a sceptic and I don’t believe the PAP will change its stripes – at least not fast enough to prevent even more trouble at the next election. At the same forum I commended George Yeo for calling for a move to a more mature, thoughtful policy framework. Then I asked him when he thinks Singapore will stop hanging people. (Singapore releases poor and patchy data, but in some years has had the highest per capita state execution rate in the world.) The response was interesting: no more new George/new PAP. He simply said that killing people has a deterrent effect and that most Singaporeans are in favour of it. This is the old PAP we know and love: not letting facts or logic get in the way of what it wants to do. First, there is no statistically robust evidence – and there are many studies – that capital punishment has a deterrent effect, so the claim to the contrary is disingenuous. Second, the logical case against capital punishment doesn’t hinge on the debate about deterrence anyway. Instead — at least for me — the sledgehammer argument against capital punishment is that you cannot guarantee in any legal system not to make mistakes; and when you do make a mistake, you cannot bring wrongly-hanged people back from the dead. I have looked in detail at miscarriage of justice cases in both the UK and the US, each of which has a better, more transparent legal system than Singapore. So when George offered the sop that he is open to looking for better ways to kill people, I wasn’t overly impressed. In reality of course, the PAP is sufficiently embarrassed at some level about its barbarism that the number of killings has fallen sharply as its political support has waned in the 2000s and 2010s; in 2012, the number of convictions subject to mandatory capital punishment was reduced.

See the 22 April AFP story below about the life-threatening smog enveloping Singapore. It comes (largely) from deliberately set fires on and around oil palm plantations in Sumatra, fires illegally set to facilitate land clearance.

You need additional information to read the story properly. Here it is. The story identifies two firms as largely responsible for the fires:

1. APP (Asia Pulp & Paper). The tale is too long to tell in detail here. Look it up in Asian Godfathers. Controlled by the Widjaya family, who defaulted on US$14 billion of debt (no, that is not a typing error) during the Asian crisis and then set out to buy the debt back at cents on the dollar. They did this by the most extraordinary acts of financial subterfuge, many of which were run through Singapore-based and Singapore-‘regulated’ institutions. A 2002 petition by creditors to the Singapore courts to have APP taken over and run by a local administrator was rejected. The Widjayas are serial law breakers. Where is their business run from? Singapore. Where did they hole up, and who protected them, after the Asian crisis? Singapore.

2. APRIL (Asia Pacific Resources International Holdings Ltd). Controlled by Sukanto Tanoto, who in the wake of the Asian crisis in 2006 was listed by Indonesian state bank Mandiri as one of its six biggest delinquent debtors. He owed Rupiah5.4 trillion. Tanoto was also under investigation for fraud at his own bank, Unibank, which after the Asian crisis was reported by regulators to have extended 51% of its loans to Tanoto firms; the maximum legal limit for loans to related parties was 20%. Tanoto is a serial law breaker. Where is his business run from? Singapore. Where did he hole up, and who protected him, after the Asian crisis? Singapore.

Finally, what is the east Asian market where it has been least possible to distribute Asian Godfathers since its publication in 2007 (way more difficult than in ‘authoritarian’ China). That’s right. Singapore!

Palm oil companies behind Singapore smog: Greenpeace

Fires on Indonesia’s Sumatra, which have cloaked Singapore in record-breaking smog, are raging on palm oil plantations owned by Indonesian, Malaysian and Singaporean companies, environmental activist group Greenpeace International said.

“NASA hotspot data in Sumatra over the past 10 days (11-21 June) has revealed hundreds of fire hotspots in palm oil concessions that are owned by Indonesian, Malaysian and Singaporean companies,” the group said in a statement received by AFP.

Singapore’s smog index hit the critical 400 level on Friday, making it potentially life-threatening to the ill and elderly, a government monitoring site said. On Saturday morning, the reading was at 323, still in the “hazardous” zone.

Parts of Malaysia close to Singapore have also been severely affected by the smog this week.

“Fires across Sumatra are wreaking havoc for millions of people in the region and destroying the climate. Palm oil producers must immediately deploy fire crews to extinguish these fires. But really cleaning up their act starts with adopting a zero deforestation policy,” said Bustar Maitar, head of Greenpeace Indonesia’s forest campaign.

The Indonesian environment minister Balthasar Kambuaya said Friday that a team has investigated eight companies suspected to be behind the fires and promised to reveal the companies’ names after the probe.

“It is very clear that the fires are in APP concessions and APRIL. We need to settle this matter,” he told reporters while showing the distribution of fires from 1 to 18 June in concession areas in Riau.

APP, the world’s third-largest paper producer said in a statement late Friday that “ground verification” detected “only 7 points that are actually forest fire, affecting around 200 hectares of land”.

“They are under and being controlled by approximately a thousand fire fighting crews and their team. Our team’s preliminary investigation found that 5 of the fires were set by the community to clear land for crops and 2 cases are still under investigation”, APP added.

APRIL could not be reached for comment.

Indonesia stepped up its fire-fighting efforts Friday by deploying aircraft to artificially create rain and to water bomb the blaze.

The haze crisis has caused a dramatic escalation in tensions between tiny Singapore and its vast neighbour, with the city-state repeatedly demanding that Jakarta steps up its efforts to put out the fires.

Blogroll

Baseline Scenario
About the US economy, mostly. These boys are not too funny (they are economists) but they put in serious hours on this site and it is worth reading. Johnson is a Brit former IMF economist with perspective. Updated daily.

John Kay
About Britain and micro-economic issues. Research-heavy analysis rather than opinion. One of the few people with really clear ideas on bank regulation, but not yet (for me) fully thought through.

Krugman
Posts multiple times a day cos he’s manic. I was at a boring conference with him where he appeared to take frantic notes. Later transpired all he had written on his pad was ‘I need a beer’, about one hundred times. Still got Nobel.

Martin Wolf (FT sub needed)
Particularly good on Europe. During his life, Wolf has fallen in love with — and then become disillusioned by — the Labour Party, the World Bank, and perhaps now globalisation. The constant is his hunger for answers.

The Big Lychee
About Hong Kong. Affiliated with Hemlock, the exquisitely misanthropic, underemployed, billionaire’s gweilo running dog. Original Hemlock files available. Updated every day, because the author has a huge salary and nothing better to do.